Krugman is Good Again
By Bryan Caplan
Krugman’s latest op-ed brings back fond memories of the thinker he used to be. As David Henderson points out, Krugman plainly admits that insurance regulation makes the adverse selection problem worse:
Suppose, for example, that Congress took the advice of those who want
to ban insurance discrimination on the basis of medical history, and
stopped there. What would happen next? The answer, as any health care
economist will tell you, is that if Congress didn’t simultaneously
require that healthy people buy insurance, there would be a “death
spiral”: healthier Americans would choose not to buy insurance, leading
to high premiums for those who remain, driving out more people, and so
What makes me truly happy, though, is that Krugman is done playing populist – and back to pointing out the unintended negative consequences of feel-good policies:
You would, rightly, ridicule anyone who proposed saving money by
leaving off one or two of the legs. Well, those who propose doing only
the popular pieces of health care reform deserve the same kind of
[R]eaching out to Republicans won’t work, and neither will trying to pass only the crowd-pleasing pieces of reform.
Of course, Krugman still won’t face up to the possibility that if the public recognized all the hidden drawbacks of the “crowd-pleasing pieces of reform,” they would cease to be crowd-pleasing. But I’m not asking for miracles. As long as Krugman goes back to bluntly pointing out the many conflicts between liberal goals and liberal policies, I’ll count myself and the world lucky.